2018 HMDA Regulation Brings Additional Value Added To Type of Purchaser
Under the HMDA regulation that will take effect in 2018, an institution must report the type of purchaser for each HMDA reportable loan. This data point remains relatively the same, however an additional value has been included in the new HMDA regulation. It must be reported whether the loan was purchased by: Fannie Mae; Ginnie Mae; Freddie Mac; Farmer Mac; a private securitizer; a commercial bank, savings bank, or savings association; credit union, mortgage company, or finance company; life insurance company; affiliate institution; other type of purchaser; or if the loan was not sold during the calendar year. While this data point is fairly straight-forward, there are some reporting requirements that should be noted.
If the institution knows or reasonably believes that the loan will be securitized by the entity purchasing the loan, it should be reported as being purchased by a private securitizer. A private securitizer is an institution other than the already listed government-sponsored enterprises (Fannie Mae, Ginnie Mae, Freddie Mac, and Farmer Mac). If the institution is not reasonably certain that the purchaser will securitize the loan, then it should be reported as being purchased by the appropriate institution. Another caveat in regards to private securitizers is if the purchaser fits into one of the other reportable types and is also a private securitizer. In this case, the loan should be reported as being purchased by a private securitizer.
An affiliate institution is a company that controls or is controlled by the financial institution. If the purchaser of the loan is an affiliate institution but also fits into one of the other reportable types, then the purchaser should be reported on your HMDA LAR as being an affiliate.
The purchaser should be reported as being Not Applicable if the application was denied, withdrawn, closed for incompleteness, or approved but not accepted. Another situation in which Not Applicable should be reported is if the institution sells some interest in the loan but retains the majority interest. However, if the institution sells all or the majority interest to more than one entity, then the entity that purchased the greater interest should be reported on your HMDA LAR.
For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.